Los Angeles Prosecutors Using Tax Evasion Charges To Convict Doctors of Health Insurance Fraud
The Los Angeles Times on Monday examined a strategy by Los Angeles County prosecutors to seek "relatively simple tax evasion charges" rather than lengthy investigations into doctors who have allegedly committed health insurance fraud. While the technique is not new, "prosecutors say it is rarely used and has the potential to catch big-time swindlers in a simple, straightforward way," the Times reports. County Deputy District Attorney Albert MacKenzie said that to investigate a tax evasion case, he sends an e-mail to state and federal agencies and insurance companies to determine how much money the suspect has been paid for providing health services. Then MacKenzie sends the results to the state Franchise Tax Board, which determines whether the individual underreported income or failed to file tax returns. MacKenzie said, "What I'm basically trying to do is connect the dots. I go around adding up how much money they've collected from all of the honey pots they're stealing from." According to the Times, the Department of Insurance previously would inspect a doctor suspected of fraud either by interviewing past patients and examining billing over a period of time or by posing as a patient to determine if doctors were billing for services not provided. Both efforts "required a lot of time, energy and staff" with "long and complicated" trials, the Times reports. The different strategy "has been well received by insurance and tax officials," according to the Times reports. Kathy Scholz, bureau chief of the Department of Insurance's workers' compensation antifraud program, said that the strategy is better and faster than long investigations, adding that she believes other counties will adopt the technique. County prosecutors say that they intend to use the strategy to file six cases against three doctors, two lawyers and a dentist during the next few months (Gorman, Los Angeles Times, 5/17).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.